Komehyo Holdings Co., Ltd. · TSE:2780
Komehyo — FY2019 Earnings Presentation
54 slides from Komehyo's earnings presentation, May 2019
Slide 1: Earnings Results Briefing for the Fiscal Year Ended March 31, 2019
Earnings Results Briefing for the Fiscal Year Ended March 31, 2019 May 2019 KOMEHYO Co., Ltd. Securities code: 2780 (Second Section, Tokyo and Nagoya Stock Exchanges) Corporate Planning Department IR strategy group TEL:+81-52-249-5366
Slide 2: INDEX
INDEX １．Overview of Financial Results for the Fiscal Year Ended March 31, 2019 P. 02 ２．Business status P. 14 ３．Plan for the Fiscal Year Ending March 31, 2020 P. 26 ４．Medium-term Management Plan P. 36 ５．Reference Information (Company Profile, etc.) P. 48 Note: This document is an English translation
Slide 3: FY 2019 Financial Summary
FY 2019 Financial Summary Performance Highlights (Consolidated) Net Sales 50,960 million yen, 1.1 times Year on Year Operating income 1,860 million yen, 1.1 times Year on Year Ordinary profit 1,826 million yen, 1.1 times Year on Year Net income attributable to owners of parent company １,009 million
Slide 4: Economic Trend
Economic Trend While the economic environment remains on a moderate recovery path, uncertainty is growing in the global economy. Net sales YoY Stock Price (%) Department store(fine arts/jewelry/precious metals) （yen） 140 KOMEHYO net sales(non-consolidated) Nikkei Stock Average(monthly closing price)
Slide 5: Overview of Income Statement (Consolidated)
Overview of Income Statement (Consolidated) FY2017 FY2018 FY2019 (Millions of yen) Change YoY (‘16.4-’17.3) (‘17.4-’18.3) (‘18.4-’19.3) Net sales 40,134 45,497 50,960 ＋5,462 112.0％ Gross profit 11,144 12,968 13,796 ＋828 106.4％ Gross profit margin 27.8％ 28.5％ 27.1％ △1.4pt － SG&A expenses 10,312 11,34
Slide 6: Net sales (Consolidated)
Net sales (Consolidated) Net sales (Millions of yen) Brand Fashion Tire and Wheel Others 50,960 50,000 45,903 45,497 43,199 40,212 40,134 40,000 34,368 28,914 30,000 20,000 10,000 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 5
Slide 7: Profit Margin Trend (Consolidated)
Profit Margin Trend (Consolidated) (%) Gross profit margin SG&A expenses to sales ratio Operating income margin 35 30.9 31.4 30.5 28.1 28.5 27.8 28.5 30 27.1 25 24.8 25.7 24.9 20 23.4 23.9 23.2 23.4 22.4 15 10 7.5 7.2 6.1 6.1 4.7 3.6 3.7 5 2.1 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY201
Slide 8: SG&A expenses (Consolidated)
SG&A expenses (Consolidated) (Millions of yen) Selling expenses Personal expenses Administrative expenses 11,936 12,000 11,342 10,038 10,271 10,312 9,627 10,000 8,518 8,000 6,765 6,000 4,000 2,000 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 7
Slide 9: Operating Income (Consolidated)
Operating Income (Consolidated) Operating Income Operating Income (Millions of yen) Brand Fashion] Tire and Wheel Others Operating income margin Margin (%) 3,129 2,999 10 3,000 2,789 2,500 8 2,103 7.5 1,860 2,000 7.2 6 1,625 1,368 6.1 6.1 1,500 4.7 4 1,000 832 3.6 3.7 2 500 2.1 0 0 FY2012 FY2013 FY2
Slide 10: ROA and ROE (Consolidated)
ROA and ROE (Consolidated) (%) ROA ROE 15 13.7 13.2 11.1 10.7 12.9 12.8 10 7.2 9.7 9.7 6.1 6.3 5 6.2 3.3 5.8 5.2 2.0 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 9
Slide 11: Operating income increase and decrease factor (Consolidated)
Operating income increase and decrease factor (Consolidated) Operating income increased due to an increase in net sales (Millions of yen) 3,000 Gross Profit margin decrease△728 2,500 Sales amount increase ＋1,557 SG&A Expenses 2,000 increase △593 1,500 1,860 1,625 Selling expenses △343 Personal expen
Slide 12: Overview of Balance Sheet (Consolidated)
Overview of Balance Sheet (Consolidated) Increase in Net assets by opening new stores and grouping Shellman (Millions of yen) Total assets Total assets Liabilities and Net Assets Liabilities and Net Assets 27,147 30,507 27,147 30,507 Cash and deposits Current Liabilities Cash and deposits 5,487 Curr
Slide 13: Statement of Cash Flows (Consolidated)
Statement of Cash Flows (Consolidated) Increased Cash flows from financing activities due to increase investments (Millions of yen) Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents 6,086 4,769 4,257 3,886 3,322 2
Slide 14: By Segment
By Segment (Millions of yen) FY2017 FY2018 FY2019 Change YoY Net sales 35,396 40,618 46,377 ＋5,758 114.2％ Fashion Brand Operating 692 1,476 1,730 ＋253 117.2％ income Operating 2.0％ 3.6％ 3.7％ ＋0.1Pt － margin Net sales 4,645 4,787 4,507 △280 94.1％ Tire and Wheel Operating 113 95 95 +0 100.4％ income Ope
Slide 15: Business status
１．Overview of Financial Results for the Fiscal Year Ended March 31, 2019 P. 02 ２．Business status P. 14 ３．Plan for the Fiscal Year Ending March 31, 2020 P. 26 ４．Medium-term Management Plan P. 36 ５．Reference Information (Company Profile, etc.) P. 48 14
Slide 16: Brand・Fashion Initiatives 1
Brand･Fashion Initiatives 1 FY2019 Target Results, etc. KOMEHYO １．Enhancement of purchases from individual customers ・Increase in purchases of used goods from customers →Approx. 130% Year on Year purchase price of large stores at existing stores (mainly at 3 large stores) (Umeda/Meieki/Shinjuku ANNE
Slide 17: Purchases from individual customers
Purchases from individual customers Record amount of individual purchases through new store openings and various measures Amount of purchase from individual customers FY2017 FY2018 FY2019 Change YoY (Millions of yen) purchase center 15,927 18,009 20,109 ＋2,099 111.7％ Home delivery 789 906 957 ＋50 10
Slide 18: Purchase event
Purchase event Partial amendment of the Secondhand Articles Dealer Act, we went to "Customer's usual location" to make reuse more accessible. Event Partners interphase Percentage of new customers Hoshigaoka Terrace 2018.6.13 – 7.9 49% Komeda Coffee Honten 2018.10.28 – 11.11 76% Hoshigaoka Terrace 20
Slide 19: New Store: the purchasing center
New Store : the purchasing center Location Opening date Purchase Center Toyota Toyota City,Aichi Prefecture Oct 2018 Purchase Center Kyodo Nodai Street Setagaya-ku Tokyo Nov 2018 Purchase Center Mukogaoka-Yuen Station Kawasaki City, Kanagawa Prefecture Dec 2018 Purchase Center Hoshigaoka Terrace Nag
Slide 20: E-commerce-induced sales
E-commerce-induced sales “Buy Online and Pick up in Store,” connecting brick-and-mortar stores with e-commerce sites, is on an upward trend Net sales No. of products sold (Millions of yen) FY2017 FY2018 FY2019 YoY YoY E-commerce-induced sales 6,147 7,594 8,119 106.9％ 107.1％ E-commerce-induced sales
Slide 21: Customer Management
Customer Management Integrated management of customer information , covering physical and online stores Card members(FY2019) No. YoY Total members 860,000 108.6% 【 Customer management 】 Management of visit history of card-holding Sales Online members, including store visit dates, stores store Store
Slide 22: Sales to corporate customers
Sales to corporate customers KOMEHYO Auction Distribution Value Expansion Trend Trade volume No. of member YoY (Millions of yen) companies 942 FY2019 23,200 126.9% ※112companies increased this term 【Transition of auction distribution amount 【Auctions are held twice a month】 for domestic corporations
Slide 23: Talent Development
Talent Development Systematic training of appraisers who are capable of judging Total No. of VMD masters（Internal qualification） Total No. of appraisers and VMD instructors（National qualification） FY2019 355 persons 90 persons YoY Change + 26 persons ± 0 persons [KOMEHYO appraiser] Systematic develo
Slide 24: Talented person fixation degree
Talented person fixation degree Staff turnover remained low , improving the stability of the work force Turnover The No. of employees（Brand-Fashion) The No. of rate（％） Turnover rate employees 30 General regular workers(except part-time workers)(Ministry of Health,Laver and Welfare) 487 548 500 520 5
Slide 25: Brand・Fashion business Initiatives 2
Brand ･ Fashion business Initiatives 2 19.3 Target Results, etc. KOMEHYO HONG KONG LIMITED Overseas business management →Net sales of 1.74 billion yen Expansion of B-to-B business in Hong Kong (Approx. 122% Year on Year ) （Auction , Jewelry show） BEIJING HUAXIA KOMEHYO LIMITED Expansion of B-to-C bu
Slide 26: Tire and wheel business Initiatives
Tire and wheel business Initiatives FY2019 Target Results, etc. Craft, AUTO PARTS JAPAN １．Enhancement of online sales and →Two of the Craft stores were converted to「U-ICHIBAN」 →Function consolidation at Auto Parts Japan in April 2018 Aiming to Second-hand goods shop ｢U-ICHIBAN｣ Two of the Craft stor
Slide 27: Plan for the Fiscal Year Ending March 31, 2020
１．Overview of Financial Results for the Fiscal Year Ended March 31, 2019 P. 02 ２．Business status P. 14 ３．Plan for the Fiscal Year Ending March 31, 2020 P. 26 ４．Medium-term Management Plan P. 36 ５．Reference Information (Company Profile, etc.) P. 48 26
Slide 28: Fiscal 2020 Plan (Consolidated)
Fiscal 2020 Plan (Consolidated) Higher costs due to business expansion are expected to result in higher sales and lower profits FY2020 (Millions of yen) YoY FY2020 plan YoY 1H plan Net sales 27,000 115.8% 56,400 110.7% Operating income 458 93.5％ 1,329 71.4% Ordinary income 427 85.7％ 1,261 69.0% Net
Slide 29: Group structure ('19.5)
Group structure (‘19.5) Brand Reuse Business KOMEHYO retail store operation "KOMEHYO" "LINK SMILE" "USED MARKET" KOMEHYO AUTO Four by four KOMEHYO Eve HONG KONG Shellman Craft Parts Engineering Auction Corporation B2B Auction Business LIMITED Japan Services BtoB BtoB Apparel business, Antique watch,
Slide 30: Brand・Fashion Business
Brand・Fashion Business Aim to capture the top market share and expand GMV (total amount of distribution) 【Growth image】 1． Strengthening Individual Purchase ↑ *Promoting Alliance and Purchasing Events Net *Continue to open stores specializing in purchasing sales New business 2． Strengthening the Cor
Slide 31: Brand・Fashion Business relocation plan for the Shinjuku area
Brand ･ Fashion Business relocation plan for the Shinjuku area Shinjyuku store Shinjyuku store Shinjyuku WATCH store ANNEX Jewelry, precious metals, men’s bags, watches, bags, ‘19.2 men’s clothing, lady’s clothing, Purchasing Center Purchasing Center Jewelry, precious metals, men’s bags, ‘19.5 bags,
Slide 32: Brand・Fashion Business Structure
Brand・Fashion Business Structure purchase sale 1 3 General General Customer KOMEHYO Customer KOMEHYO Auction KOMEHYO HONG KONG KOMEHYO SHANGHAI LIMITED BEIJING HUAXIA KOMEHYO LIMITED 2 4 corporation corporation 31
Slide 33: Purchase (KOMEHYO): Strengthening purchase from general customers
Brand・Fashion Business Purchase (KOMEHYO) Strengthening purchase from general customers 1.KAITORI GO (Alliances and Events) Establishment of specialized departments, department stores, etc. 1 Focusing on alliances and events with General other companies Customer Home delivery Purchasing Going to cus
Slide 34: Commercialize (KOMEHYO)
Brand・Fashion Business Commercialize (KOMEHYO) Respond to increases in the volume of products purchased and purchased Main functions of Product Center １．Thorough confirmation of product authenticity/quality ２．Market price management ３．Maintenance ４．Product development speed/cost management ５．Stable/
Slide 35: Sales (KOMEHYO): Strengthen sales to corporate clients through auctions
Brand・Fashion Business Sales (KOMEHYO) Strengthen sales to corporate clients through auctions 1.Strengthen sales to corporate customers 2.Strengthen KOMEHYO auctions 3 Continue to hold two tournaments General Customer KOMEHYO ONLINE STORE Alliance corporate sales 4 corporation KOMEHYO HONG KONG 34
Slide 36: Tire and wheel Business
Tire and wheel Business Strengthen profitability by strengthening used products and highly specialized sales channels 1． Strengthening store profitability *Stores specializing in used tires and wheels: "U-ICHIBAN" *Strengthen specialized sales channels: "URBAN OFF CRAFT", "EURO style Craft" 2． Stren
Slide 37: Medium-term Management Plan
１．Overview of Financial Results for the Fiscal Year Ended March 31, 2019 P. 02 ２．Business status P. 14 ３．Plan for the Fiscal Year Ending March 31, 2020 P. 26 ４．Medium-term Management Plan P. 36 ５．Reference Information (Company Profile, etc.) P. 48 36
Slide 38: Reuse market growth rate
Reuse market growth rate The reuse market continues to grow each year (100 million yen) Market Size Comparison 30,000 Reuse market size (’17) (The Reuse Business Journal estimation) 30,000 of New and Reuse(’16) 25,000 26,000 20,000 19,932 15,000 17,743 15,966 16,517 To the new product market 14,916
Slide 39: Reuse market size
Reuse market size Online Sales Drive Market Growth Reuse market size(‘17) 1.9 trillion yen (The Reuse Business Journal estimation) 【Reuse Markets (B to C)】 (100 million yen) Store-based sales online sales Store-based sales online sales 10,000 9,763 9,460 9,315 9,240 C to C 8,000 6,905 (Composition r
Slide 40: Medium-Term Basic Objectives (Consolidated)
Medium-Term Basic Objectives (Consolidated) Aim for medium- to long-term growth through strategic investment (Millions of yen) FY2020 FY2021 FY2022 (‘19.4-’20.3) (’20.4-’21.3) (’21.4-’22.3) Net sales 56,400 62,300 68,000 Operating income 1,329 2,210 2,630 Operating margin 2.4% 3.5% 3.9% 39
Slide 41: Net Sales Plan (Consolidated)
Net Sales Plan (Consolidated) Generate JPY68 billion on a consolidated in the fiscal year ending March 31, 2022 (Millions of yen) 68,000 62,300 56,400 50,960 45,497 FY2018 results FY2019 results FY2020 plan FY2021 plan FY2022 plan 40
Slide 42: Profit Plan (Consolidated)
Profit Plan (Consolidated) Aim for medium- to long-term growth through strategic investment Operating income Ordinary income Net income attributable to owners of parent (Millions of yen) 2,630 2,630 2,210 2,170 1,860 1,826 1,625 1,610 1,700 1,329 1,261 1,370 1,073 1,009 727 FY2018 results FY2019 res
Slide 43: Three key themes for mid- and long-term growth strategy
Three key themes for mid- and long-term growth strategy Purchase KOMEHYO GROUP Reuse Global Tech 42
Slide 44: Purchase KAITORI GO
Purchase KAITORI GO Established a specialized department to focus on alliances with other companies and events 【Joint purchase events with other companies】 Customers feel when selling unwanted goods "Do they really sell?" With psychological hurdles such as "It is difficult to go to the purchase shop
Slide 45: Global
Global Aim to expand reuse business overseas BEI JING HONG KONG North America Bangkok SHANG HAI Southeast Asia Cities that already have a presence Under investigation 44
Slide 46: Reuse Tech AI authenticity
Reuse Tech AI authenticity Data Technology — Leverage the vast amount of data in your enterprise 【Purpose of introducing AI】 More efficient Efficiency of the purchase process education for appraisers Enhance communication with Global Expansion customers *To be introduced in FY 2019 45
Slide 47: Reuse Tech Omni-channel
Reuse Tech Omni-channel Promotion of omni-channel linking stores and the Internet introduction at the store App Back order service Store KOMEHYO WEB LINK SMILE ONLINE STORE 【Advantages of ordering】 USED MARKET In order to check the product visually, You can purchase with a sense of security and sati
Slide 48: Reuse Tech Free market app
Reuse Tech Free market app Solving social problems such as the distribution of illegal products with the ability to appraise them 【Free market app specializing in brand- name products：KANTE】 Providing purchasers with a sense of Proportion of persons using expert assurance through judgment of authent
Slide 49: Reference Information (Company Profile, etc.)
１．Overview of Financial Results for the Fiscal Year Ended March 31, 2019 P. 02 ２．Business status P. 14 ３．Plan for the Fiscal Year Ending March 31, 2020 P. 26 ４．Medium-term Management Plan P. 36 ５．Reference Information (Company Profile, etc.) P. 48 48
Slide 50: Corporate Profile
Corporate Profile Company name KOMEHYO Co., Ltd. Established May 1979 Head Office 3-25-31 Osu, Naka-ku, Nagoya Representative President, Representative Director: Takuji Ishihara Capital 1,803 million yen No. of Consolidated: 689 (As of March 2019) employees Buying and selling used and new products i
Slide 51: Management philosophy
Management philosophy Founding spirit: Buy high and products gather. Sell low and people gather. Management philosophy: We help customers build affluent lives. We create a fair, positive, and rewarding workplace. We develop human resources who respond to changes and continue to challenge themselves.
Slide 52: Corporate History
Corporate History ●Opened Purchasing Center Yurakucho､ Ikebukuro-nishiguchi、tachikawaｰkitaguchi ●Opened Jiyugaoka store ●Established Auto Parts KOMEHYO KK (currently AUTO PARTS JAPAN) ●Established KOMEHYO HONG KONG LIMITED ●Acquired CRAFT Co., Ltd. ●Established Product Center ●Established KOMEHYO Au
Slide 53: Store Type
Store Type 28 stores Large-scale Nagoya Store，Meieki Store, 5 stores Shinjuku Store/ANNEX， Sale and purchase * Ginza Store，Umeda Store Ladies Sales/Purchase casual clothing, Jewelry, precious metals, Bags, small items, etc. watches,bags,clothing,etc. 6stores Mid-scale Opening stores in large major c
Slide 54: Shareholder return
Shareholder return Dividend changes Dividends (Yen) Dividend payout ratio 40 Fiscal year-end dividend 100 Interim dividend 90 35 Payout ratio 80 30 16 16 70 (Schedule) 25 60 20 50 15 40 44.0 30 10 34.7 20 (Schedule) 5 10 16 16 0 0 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017